The Dichotomy of Seat and Venue of Arbitration Continues
SUPREME COURT OF INDIA
Mankastu Impex Pvt. Ltd. v. Airvisual Ltd.
ARB. PETITION 32/2018 | DATE: 05.03.2020
The Petitioner and the Respondent had entered into a MoU whereby the Petitioner was an exclusive distributor of the Respondents Air quality monitors products for a period of 5 years. The former is a company incorporated in India whereas latter is incorporated in Hong Kong.
Thereafter, the Respondent was acquired by IQAir AG (“Respondent No.2”). The Petitioner was intimidated by Respondent No. 2 that as a consequence to the acquisition, the product was discontinued and that it was not bound by any contractual or legal obligations of the Respondent.
The Petitioner invoked the MoU. It brought to the knowledge of the Respondent No. 2 that MoU explicitly specified that incase of situation like an acquisition, the Respondent was obligated to ensure that the acquiring party shall uphold the same contractual obligation and that the acquisition was done only after considering the pre-existing obligations.
The Respondent rejected to consider the Petitioners averments, hence the Petitioner then resorted to invoke the Clause 17 i.e. the arbitration clause of the MoU.
“Clause 17 – Governing law and Dispute Resolution
17.1 This MoU is governed by the laws of India, without regard to its conflicts of laws provisions and courts at New Delhi shall have the jurisdiction.
17.2 Any dispute… shall be referred to and finally resolved by arbitration administered in Hong Kong.
The place of arbitration shall be Hong Kong.
17.3 It is agreed that a party may seek provisional, injunctive, or equitable remedies, including but not limited to preliminary injunctive relief, from a court having jurisdiction, before, during or after the pendency of any arbitration proceeding.”
The Petitioner further filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (“the Act”) for order –
- directing the Respondent No. 1 and 2 to execute the MoU;
- permitting the Petitioner to act as the exclusive distributor over the products; and
- refraining Respondent No. 1 and 2 from terminating the MoU and also from contracting third parties for the subject matter. The Court injuncted the Respondent from selling the products in India.